With smart technology taking off big time, Gekko MD Daniel Todaro asks, can you afford not to join the connected party?
The connected home is now reality, not a fantasy. The global market for smart-home appliances is expected to be worth $38.35 billion by 2020, and will only grow as demand and consumer interest in smart appliances increases. Shoppers will be looking for smarter appliances, but these can be balanced with regular models depending on a consumer’s desire to have some or all of their devices connected.
Some categories are clearly just jumping on the bandwagon, such as a connected SDA, which is in most cases an expensive and underused version of a regular appliance.Yet when considering the connected home from a long-term financial and time-efficiency perspective, some are valid purchases, once you’ve weighed up the cost against its potential long-term worth. Many of these domestic appliance products are, however, costly and there’s a good chance that if you could afford a kitchen and utility room full of connected devices, you’re perhaps not going to be the one cleaning or cooking and directly using the connected devices.
For retailers, the margins on smart appliances are evident, however this must be weighed up against unit sales, which may mean a lower margin than your bread-and-butter range could achieve if it were occupying the same space in your store. While the investment in ranging smart appliances may not be attractive at the moment, remember that sales in John Lewis stores in the smart-home category increased by 81 per cent year on year from 2014 to 2015. This is a growing trend that will likely spread to independent retailers, as smart appliances become increasingly more mainstream.
Having a select range of smart appliances gives your store an aspirational product and proposition for shoppers to consider when looking for a new washing machine or fridge. It’s worth considering that many shoppers looking to purchase a new appliance are doing so as a ‘distress purchase’. These consumers will be looking for a reliable device, not necessarily one with smart features.
However, a demonstration from a knowledgeable staff member connected via a tablet or smartphone, to explain the benefits of the smart system, may persuade many shoppers to purchase for the long-term benefits. These include compatibility with future smart appliances they may add to their home.
My advice is to pepper your range with connected devices, but don’t forget the mass-market appeal of traditional appliances and offer choice at all price points and functionality.
Not too late to take on wearables
When it comes to wearables, many retailers may lack the knowledge needed to make them a success in their stores. As a developing category that’s creating a lot of interest in the media and among shoppers, expanding the knowledge base of your staff will help to develop it as a mainstay category in your store.
Firstly, educate your staff on how wearable devices can make a positive impact on a customer’s health and lifestyle. Whether you ask a supplier to assist you with extra training, or run a training session yourself, it’simportant for your staff to understand the category. Encourage your staff to use a wearable device themselves, helping them to understand wearables and become brand advocates. Their knowledge will help to improve in-store education and awareness of the category. Make it part of team building by creating store challenges on the number of steps, etc.
With your staff knowledgeable and ready to assist, educate your customers on the same health and lifestyle benefits by giving them an opportunity to see the device in action through a demonstration, using the team dashboard to aid the process.
Arming staff with a device and a synched smartphone will allow them to demonstrate the product’s functionality. Each customer will have a different reason for enquiring about a wearable device, so have your staff training focus on communication skills so they can offer tailored advice to individual shoppers.
If you’re concerned that your customers will not be interested in purchasing a wearable product, having a staff member speak passionately about how a device can help improve a customer’s health and fitness may change their perception of the category. Don’t forget the compatibility factor and ease of use, as all devices sync with almost any make of smartphone.
It’s not too late to consider ranging wearable technology. The category is continuing to grow and won’t be fading anytime soon. Get over your fears, educate your staff and start with a range that offers choice for each user at a price and functionality level that meets their needs.